Jeff Judy

Jeff's Thoughts - November 28 , 2007

Assessing Leadership From Afar

I've done my fair share of consulting with the boards of directors and executive committees of banks and holding companies, whether developing credit policies, assessing the company culture, facilitating strategic discussions, or adapting procedures and practices to reach the institution's goals. From one bank to the next, I see very, very different leadership styles, based on what they know, how they influence employees, how they work together, and what they want to achieve.

I have discovered that you can learn a lot about the bank's leadership long before you sit down around the conference table with the key players. Sniff the air, pay attention to the wind, and you can make a pretty good guess about where the organization is headed -- if anyplace --and why.

Look at a few of their locations and see if all of them are playing by the same rules. After all, the board and top executives are what they all have in common. When various locations all go their separate ways, the organization isn't really being run from the board room. Weak leadership, sometimes the result of board members who are too new, or too little involved, leaves others in the company to set their own directions.

On the other hand, sometimes I find that no one can make a decision without one or two key board members or executives giving their blessing. Company employees, even some who are fairly high up in the organization, are more worried about being caught making a mistake than they are about achieving goals. In that situation, I expect to walk into a board room where only a couple of players really count -- the powerful ones who are micromanaging the company.

Some banks are led by boards and executive teams that can't hold a long-term view. Mergers and acquisitions are not systematic and logical, they are simply opportunistic. Employees aren't engaged in what they are doing and how they are doing it, because they know that in six months, a year, or two years, some new fad will blow through the bank and everything will change.

The influence of the leaders -- or lack of it -- is felt by all employees and customers, whether or not they ever actually meet the leadership team. To gauge the future success of the company, look for:

things the leaders stick their fingers into when they aren't really needed;

things they ignore when they should be involved;

whether there are common values among employees and locations, or whether every unit makes up its own rules;

whether the front line employees are optimistic or fearful, whether they seek opportunity or try to keep their heads down, whether they welcome new strategies or just try to wait out fads.

For good or ill, you can feel the influence of your corporate leaders at every level of the institution. Just look around, the signs are everywhere.

What are the signals that your bank leadership is sending out to employees, prospects, and customers?